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August 9, 2012

Social Media Can Pay Off Despite Challenges: Accenture

Compliance means processes, procedures, training, technology

The use of social media by wealth management firms can offer tremendous opportunities, according to a new paper from consulting firm Accenture. Compliance challenges still exist, however, as companies move from social networking pilot projects to “socially infused” marketing and sales channels.

The paper, titled “The Social Advisor: Using Social Media Effectively in Wealth Management,” says that, despite the fact that social media are allowed as means of communicating with clients, many firms are still feeling their way toward a more robust incorporation of them into their business models, even as clients and prospective clients rely on them more and more.

The lack of specific guidance, but strict enforcement, by regulators contributes to a complex picture as firms test strategies and tools. And wealth management firms using social networking tools will find that those tools involve a number of costs. Accenture says those costs include social media management software, archiving and storage space, content partners, training curricula, regulatory upkeep, and dedicated resources to manage the communication.

“Firms need to determine,” the report says, “what costs are part of doing business and what costs are pushed into the channel.”

And it’s not just costs. New guidelines and procedures are required for advisors to be able to use social media and still remain in compliance, the report says. Processes need to be developed for new content creation, moderation of dialogue with clients, and management of compliance and risk.

Social media policies must be developed and social interaction activities mapped in detail, Accenture suggests. Firms should also set an objective of continuous improvement and steps to manage change, lest the process and its support staff—everyone from content creators and approvers to legal reviewers—become difficult to control and fail to keep in scale with the firm’s business.

Firms must also consider integration of their social media efforts with anything undertaken by other areas within the firm, such as enterprise social listening teams and social marketing initiatives.

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